TREASURY

ECOFIN (4 December 2007)

Alistair Darling: The Economic and Financial Affairs Council will be held on 4 December in Brussels. The agenda will be as follows:
	Implementation of the Stability and Growth Pact
	The Council will discuss whether Poland has met the 27 August 2007 deadline to correct its excessive deficit procedure, following discussion of the issue at the Economic and Financial Committee. The UK supports a prudent interpretation of the Stability and Growth Pact, which takes into account the economic cycle, sustainability and the important role of public investment
	Lisbon Multilateral Surveillance
	Ministers will be asked to agree draft conclusions on the multilateral surveillance element of the Lisbon national reform programmes. These conclusions have been prepared at the Economic Policy Committee and the Economic and Financial Committee. The UK welcomes multilateral surveillance under the Lisbon strategy, which encourages member states to focus on the implementation of the Lisbon strategy.
	Globalisation: Capital and Labour Flows
	Ministers will be asked to agree conclusions on the economic dimension of migration. This follows from an exchange of views at November ECOFIN on the basis of a report on the economic impact of migration prepared by the European Commission. At the November meeting, Ministers agreed that it was important that the economic dimension should be considered in broader discussions of migration.
	Financial Services: a) Directive on the Solvency of Insurance Companies (Solvency II)
	Ministers will be invited to discuss the proposed Solvency II directive on the prudential requirements for insurance and reinsurance companies. The debate will focus on a paper prepared by the Portuguese presidency, which endorses a need for further work on certain key areas of group supervision.
	b) Lamfalussy Review
	Ministers will be asked to agree Council conclusions on the review of the Lamfalussy arrangements. The UK believes the Lamfalussy arrangements have made a major contribution to improving the efficiency of the EU legislative process and enhancing supervisory co-operation. The UK believes the draft council conclusions represent an appropriate consensus about how the Lamfalussy arrangements should evolve going forward.
	c) Risk Capital
	Ministers will be asked to agree Council conclusions on cross-border risk capital, which have been prepared by the Financial Services Committee. The UK supports work to break down the key remaining barriers to development of a European venture capital market.
	Taxation:
	a) VAT Package
	Following on from its discussion at its November meeting, the Council will be asked to agree a set of measures that will modernise the EU VAT rules for the cross-border supply of services, with particular focus on proposed changes to the rules for the telecoms, broadcasting and e-services sectors. The UK strongly supports these proposals.
	b) Reduced VAT Rates
	i) Commission communication on VAT rates other than the standard rate.
	Ministers will be asked to agree Council conclusions that will provide political guidance for the Commission to enable it to prepare a new legislative proposal on VAT rates.
	ii) Proposal for a Council directive amending Directive 2006/112/EEC with regard to certain temporary provisions concerning rates of VAT.
	Ministers will then discuss the Commission proposal to extend until 2010 some of the new member states' derogations for reduced VAT rates. The UK believes that member states should be given flexibility to apply reduced VAT rates where these will not materially affect the single market, and therefore supports the extension of most of the temporary derogations granted to those member states that acceded to the European Union after 1 January 1995.
	c) Capital Duty Directive
	Ministers will then be asked to discuss a Commission proposal for a directive concerning indirect taxes on the raising of capital. The UK abolished capital duty in 1988.
	d) Combating Tax Fraud
	Ministers will be asked to agree conclusions on work to improve arrangements to combat tax fraud, which have been prepared on the basis of a report by the Commission. The UK is strongly supportive of work that will help in the fight against Missing Trader Intra-Community (MTIC) and other VAT fraud, while remaining committed to minimising the burdens on legitimate businesses.
	e) Code of Conduct Group (Business Taxation)
	Ministers will be asked to agree the forward workplan for the code of conduct group, a Ministerial group which looks to coordinate and share best practice on tax-related issues that are not directly covered by EU legislation. The UK supports the proposed work programme.

ECOFIN (13 November 2007)

Alistair Darling: The Economic and Financial Affairs Council was held on 13 November in Brussels. The Financial Secretary to the Treasury attended for the UK. The items on the agenda were as follows:
	Lisbon Strategy: The New Three-year Cycle
	The Council adopted conclusions on the next three-year cycle for the Lisbon strategy, as prepared by the Economic Policy Committee. Ministers agreed that the Lisbon strategy is delivering results, and that the four priority areas for reform agreed at the 2006 spring Council (employment, knowledge and innovation, business potential, and energy and climate change) remain valid. Ministers agreed with the Commission's assessment that the integrated guidelines do not need a fundamental overhaul, as stability is an important element for the effectiveness of the Lisbon strategy. They also agreed that the main focus of the new cycle should be on the implementation and delivery of reform.
	Globalisation: Capital and Labour Flows
	The Council exchanged views on the basis of a report on the economic impact of migration prepared by the European Commission, taking into account a paper prepared by the Economic Policy Committee. Ministers agreed that it was important that the economic dimension should be considered in broader discussions of migration.
	Statistics
	The Council agreed conclusions on EU statistical matters, including the 2007 EFC status report on information requirements, the reduction of the statistical burden, EU statistical governance, and the public communication of major statistical revisions, as prepared by the Economic and Financial Committee. The UK welcomes work to reduce the statistical burden on member states.
	Taxation:
	a) VAT Package
	The Council discussed a set of measures that will modernise the EU VAT rules for the cross-border supply of services, with particular focus on proposed changes to the rules for the telecoms, broadcasting and e-services sectors. The presidency felt that good progress had been made on these proposals, which the UK strongly support. The Council is due to consider these proposals again at its meeting on 4 December 2007.
	b) Green Taxation: Passenger Car-related Taxes
	Ministers exchanged views on Commission proposals for a new directive introducing a compulsory C02 element into passenger car taxation. The UK Government are committed to combating climate change using the most cost-effective tools available, but remains to be convinced that this proposal, which would restrict member states' choice of form and structure of passenger car taxation, is necessary.
	c) Reduced VAT Rates
	Ministers discussed Commission proposals to extend until 2010 most of the new member states' derogations for reduced VAT rates. The UK Government are supportive of the proposal to extend most of the temporary derogations granted to those member states that acceded to the European Union after 1 January 1995. The Council is due to consider these proposals again at its meeting on 4 December 2007.
	Global Navigation Satellite System (GALILEO): Financing Aspects
	Ministers exchanged views on the financing of the Galileo project. The UK Government believe that sound financial management is essential to the success of the Galileo project.
	Presentation of the Annual Report by the Court of Auditors Concerning the Financial Y ear 2006
	The Council received a presentation from Hubert Weber, the President of the European Court of Auditors on the 2006 general budget. The UK Government welcome the improvements made to financial management of EU funds in 2006 and support the calls made by the Commission and the presidency for further progress to be made in this area.

DEFENCE

C-17 Globemaster

Des Browne: The Ministry of Defence recognises the importance of a robust strategic airlift capability to operational deployments. On 26 July 2007 I announced our intention to procure a sixth C-17 Globemaster aircraft. I am pleased to announce that the Ministry of Defence has now signed a contract with Boeing, totalling some £130 million, for the purchase of the sixth C-17 aircraft to be delivered in 2008. This procurement will deliver a significant increase in our capability. The four existing C-17 aircraft already make a critical contribution to sustaining current UK world wide operations, both in providing a general airlift capability and in lifting oversize items. The additional C-17 will join the existing fleet of four aircraft and a fifth aircraft which will be delivered in May 2008.

Marine Services

Des Browne: Marine services embrace a wide range of waterborne and associated support activities, both in and out of port, at Portsmouth, Devonport and on the Clyde, as well as maintenance of UK and overseas moorings and navigation marks and support to a range of military operations and training. Under the current arrangements, in-port services are provided by Serco Denholm Ltd. under Government-owned contractor operated arrangements, while out of port services are undertaken by the Royal Maritime Auxiliary Service (RMAS).
	Since 2002, we have been working to find a long-term service provider and following an industry briefing day in May 2003 and a subsequent pre-qualification questionnaire exercise, four bidders were short listed, although two subsequently withdrew. The two remaining bidders, Serco Denholm and the Starfish Consortium (the latter comprising Babcock Naval Services (Clyde), Devonport Management Ltd. (Plymouth), Fleet Support Ltd. (Portsmouth) and Smit International (Scotland) Ltd.), were invited to submit two proposals offering a complete service: one of these proposals reflected a partnering arrangement with the RMAS, whereby staff remain in the MOD; the second proposal would entail TUPE transfer as appropriate.
	Following detailed bid evaluations, using predetermined criteria, Serco Denholm's proposal to provide the complete service, including taking ownership of MOD marine service assets, was selected as the preferred bidder. Following completion of final negotiations with the company, a contract will be awarded in early December that will provide more flexibility and offer greater potential for continuous improvements. The contract for those services currently provided by Serco Denholm (Vesting Day I) will commence immediately following the award of the contract while the contract for the services currently provided by the RMAS (Vesting Day 2) will start at the beginning of April 2008.
	A key implication of the new arrangement will see the transfer of the RMAS workforce to the company under the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations. New pension arrangements are also in place that are comparable to those currently enjoyed under the Principal Civil Service Pension Scheme.
	A farther significant aspect will be the closure of Her Majesty's mooring depot at Pembroke Dock within six months of Vesting Day 2, which will lead to around 30 redundancies. New employment opportunities are, however, expected to emerge from arrangements that will form part of the contract for the sale of the dock.
	The changes in the way the service is to be provided will result in some 200 post reductions from the combined workforce of 740 during the first five years of the new arrangement. As far as possible, these will be achieved either through natural wastage or voluntary means although the need for some compulsory redundancies cannot be ruled out at this stage.
	Throughout the tendering process the Department has engaged with the relevant trades unions and this will continue as the formal TUPE consultation process commences.
	This is a complex and valuable contract and the MoD's commitment has been to ensure that we get it right for all of those concerned, especially those staff employed by the RMAS who will be affected by the new arrangements.

HEALTH

CJD Surveillance Unit (Annual Report)

Dawn Primarolo: The National Creutzfeldt-Jakob Disease Surveillance Unit's (NCJDSU) fifteenth annual report was published on 30 November. The report documents the unit's findings in relation to sporadic, familial and iatrogenic Creutzfeldt-Jakob Disease (CJD), and variant Creutzfeldt-Jakob Disease (vCJD) up to 31 December 2006. The report has been placed in the Library, and is available on the NCJDSU's website at: www.cjd.ed.ac.uk

Cancer Reform Strategy

Alan Johnson: Today the Government fulfil their commitment to publish a new cancer reform strategy. The cancer reform strategy sets out the next phase of the Government's commitment to deliver world class cancer services. Building on the progress that has been made following the NHS cancer plan (2000), the strategy recognises that there are major challenges ahead. The strategy sets out the actions that need to be taken over the next five years on prevention, early diagnosis, better treatment, improving patients' experience of care and reducing inequalities. It also sets out how these actions will be delivered by the NHS.
	The strategy has been placed in the Library and copies are available to hon. Members in the Vote Office.

WORK AND PENSIONS

Specialist Disability Employment Services

Anne McGuire: Work matters. People in work are generally better off financially and in terms of their health and well-being, their self-esteem and the future prospects for them and their families. Disabled people must get the same opportunities to benefit from work as everyone else.
	Our specialist disability employment services (job introduction scheme, work preparation, Workstep, disability employment advisers and access to work) for those who need the most support to work, or long-term support in work, make a profound difference to the lives of tens of thousands of disabled people every day. But we can make these services work better and achieve more.
	We have carried out a major review of these services and listened to the views of many disabled people, employers, external delivery partners and Jobcentre Plus staff.
	Today we have published a consultation paper "Helping people achieve their full potential: Improving Specialist Disability Employment Services" to set out how we think we can improve these services to help more disabled people reach their potential through leading fulfilling working lives. A copy of this document has been placed in the Library.
	The proposals complement our other major reforms such as pathways to work and proposals for a flexible new deal by offering additional specialist help for people with greater support needs. Alongside the modernisation of Remploy we expect these proposals would help improve our services for those disabled people who need most help to find, retain and progress in paid work.
	Responses to the consultation need to be submitted by close of business on Monday 10 March 2008.